Gold slides 1.1% to $4,364 as Treasury yields hit 2007 highs

Gold fell 1.1% to $4,364 per troy ounce on Tuesday as US Treasury yields reached their highest levels since 2007, pressuring the non-yielding metal.

The US Dollar Index held flat at 99.60, while the 10-year Treasury yield eased one basis point to 4.712% after touching multi-decade highs earlier in the session, according to FXStreet data. The 30-year yield reached 5.33%, the highest since the global financial crisis, as investors demanded higher compensation for US fiscal risk. US 30-year real yields are near 3%, their highest in roughly 18 years, according to BlackRock strategist Vivek Paul, who described the environment as a "competition for capital."

Housing starts fell 12.4% month-over-month in July to 1.239 million units from 1.415 million in June, pressured by elevated mortgage rates and high home prices, while industrial production rose 0.2% versus the 0.3% expected. The Federal Reserve's July policy meeting minutes are due Wednesday and will be scrutinized for guidance on the rate path.

Gold broke below its 100-day simple moving average at $4,384, with the relative strength index dipping, indicating sellers are gaining control. Support sits at $4,350, then $4,300, followed by the July 6 high at $4,202 and the 50-day SMA at $4,146. A recovery above $4,400 would open the path toward $4,450 and the $4,500 milestone.

The Middle East conflict remains unresolved after US President Donald Trump said Iran is unlikely to accept Washington's terms, while Iran has threatened to keep the Strait of Hormuz closed. Oil prices remain underpinned by the uncertainty, which favors a Federal Reserve rate hike. A weaker-than-expected jobs report and cooling inflation data have led investors to price out rate hikes in 2026.

The US federal deficit reached $1.799 trillion in the first 10 months of fiscal 2026, already above the entire 2025 shortfall, with Fitch expecting the broader government deficit to remain around 7.4 percent of GDP in 2026 and 2027. The fiscal trajectory is a key driver of the long-end yield surge, with the 30-year Treasury auction on Aug. 13 clearing at 5.216 percent, the highest borrowing cost for that tenor since 2001.

Silver, the closest precious-metal peer, is consolidating as bullish momentum fades, according to FXStreet analysis, with the broader complex under similar pressure from the yield environment. Gold's decline comes as the metal trades roughly 8 percent below its recent highs, with the 50-day SMA at $4,146 representing the next major technical reference if current support levels fail. The July 6 high at $4,202 and the 50-day SMA at $4,146 form a dense support cluster that could attract buyers if the selloff extends.

This article is for informational purposes only and does not constitute investment advice.